Insights and advice

Our Insights and Advice page is designed to keep you across the latest accounting trends as well as dispensing valuable advice and insider tips.

You’ll also discover how we work flexibly with a range of different businesses. One accounting solution does not fit all, and we work closely alongside our clients to deliver services to meet their specific requirements. At Moore Stephens Markhams we are serious about creating success for you and your business.

Whether you’re thinking of becoming a trustee for your own family trust or someone else’s, it’s important to know your obligations under the current law before accepting the role.
8 things to know before becoming a trustee

It’s a legal responsibility with a lot of work involved (most often voluntary) and you could end up being liable for losses made by the trust if you don’t do the job properly.Read more »

Family trusts are a popular way to protect and manage your assets, such as the family home, for you and your family, now and in the future. They can have a valuable role to play, but they’re not suitable for everyone.Read more »

Up until now, a trustee’s job description has been clear as mud with many families getting into strife unaware of their trustee’s responsibilities. If the new bill comes into place, a trustee’s role will be clearly outlined, and include:

Knowing the terms of the trust
Acting according to the terms of the trust
Acting honestly and in good faith
Acting for the benefit of the beneficiaries or the permitted purpose of the trust

#1 Extending perpetuity laws
Now, when you set up a family trust, it has a time limit of 80 years. Then you have to wrap it up and distribute the assets. The new legislation suggests extending it to 125 years, which may involve significant succession planning adjustments.Read more »

An expert, independent set of eyes will help you determine what you need to do in all cases, what you don’tneed to do, and also how to go about doing it (including creating proper documentation).
The value of expert advice is heightened by some of the finer points of FBT legislation.Read more »

If you’re applying for an ACC CoverPlus Extra policy, it’s worth noting that the policy no longer starts on the date of the application, but when you sign the offer letter. So, if you have such a letter in your in-tray waiting to be signed,Read more »

Given the importance of keeping your PAYE and GST record-keeping and payments in order, it might be tempting to think that Fringe Benefit Tax, or FBT, is a relatively minor thing. But don’t be fooled. In 2017, Inland Revenue created a dedicated audit team to focus on this issue.Read more »

The New Zealand Accounting Standards Board (NZASB) has published for public comment, proposals to amend the Tier 3 and Tier 4 PBE simple format reporting standards.
We have summarised the proposed changes here for you:
Tier 3 proposed changes

Related party transactions are now defined as “a transfer of money or other resource between the reporting entity and a person or other entity that is closely associated with the reporting entity that has the ability to influence the reporting entity.Read more »

The Minister for the Community and Voluntary Sector announced a review of the Charities Act 2005 on 24 May 2018. The purpose of the review is to ensure that the Act is effective and fit for purpose by reviewing issues arising under the Act and building on its current strengths.Read more »

A Hawke’s Bay succession planning specialist has been invited to share his knowledge with agribusiness owners at this year’s New Zealand Agribusiness Fieldays.Barry Rosenberg, a consultant with Moore Stephens Markhams Hawkes Bay, will be sharing his insights into a process that many family businesses struggle with.Read more »

Directors Dan Druzianic from Hawke’s Bay and Paul Rickerby, Christchurch recently attended a week-long Harvard Business School leadership programme developed for international Moore Stephens directors, that built on a first programme they attended two years ago.
They returned brimming with new learnings about the challenges ahead for business and we share some of these here.Read more »

Business structures tend to evolve gradually over time, and many successful commercial operations grow by adding additional companies or trusts on an ad hoc basis, until the resulting structure becomes somewhat unwieldy. There is then a need to streamline the business’s legal structure by inserting a holding company,Read more »

On 3 April this year, Inland Revenue issued a draft ‘Questions we’ve been asked’ (QWBA) covering the tax treatment of allowances and benefits paid or provided to farm workers. A key principle covering such payments centres on the tax treatment of ‘reimbursing allowances’ –Read more »

We’re delighted to announce that Jonathan Roberts has been made an Associate of our Auckland firm.
Jonathan provides business advisory and taxation services to clients involved in a large range of industries including retail, investment, farming, and legal services.Read more »

How often have you found yourself vowing to improve your health or fitness? If you are anything like the majority, chances are at some point you have embarked on some fad diet or joined the latest fitness craze aiming to get healthier,Read more »

New Zealand recently finished its most successful Commonwealth Games since 1990, generating some interesting statistics.
It was our most successful games hosted outside of New Zealand, winning 46 medals, 15 of which were gold. This was enough to see us finish 5th on the medal table,Read more »

The bright-line test came into force from October 2015, introducing rules that a profit derived on the sale of a residential property is subject to tax if sold within two years of purchase, albeit subject to some exceptions such as the family home.Read more »

Labour’s pre-election manifesto proposed to increase the fairness of the tax system and improve housing affordability. In the seven months since the Labour-led coalition entered Parliament, we have started to see some changes filtering through.
As part of the proposals aimed at house prices,Read more »

In our experience, the success of many SMEs rests in the skills, knowledge, experience, and commitment of key personnel. While no person is indispensable, often the departure of an employee in a key management, production or customer-facing role can cause significant challenges,Read more »

Over the last decade, the use of digital or virtual currencies, known as ‘cryptocurrencies’, has grown dramatically in popularity. Operating in the digital world doesn’t absolve you from your tax obligations; it also doesn’t mean your activity is untraceable.
A single piece of Bitcoin is currently valued at over $9,000 NZD.Read more »

The budget to “help rebuild New Zealand’s reputation”
Touted as predictable, it did not disappoint – nor is the Government making any apologies for this. Most of the big ticket items were, of course, announced prior to Christmas in the 100 day Budget – including the whopping $5.5 billion families package,Read more »

The decision to raise your prices is a tricky one. But in the end, it’s not the hike itself that’s important, it’s how you implement it.
Netflix, for example, put its prices up recently. And while their customers didn’t like it, after a few rumblings,Read more »

You may have heard the term ‘raving fans’. It’s a passionate subset, usually about 10 to 15 percent of your customer base, who are so in love with your business that they shout it out from the rooftops. They keep coming back,Read more »

Prime Minister Jacinda Ardern probably won’t take 18 weeks’ paid parental leave when she has her baby, but New Zealand law says she’s entitled to it.
Staff who’ve worked for you or any other employer for an average of at least 10 hours a week for any 26 weeks of the year preceding the birth or assumption of care of a child can take paid parental leave so long as they are the primary carer of the child and take leave to care for the child.Read more »

Loss offsets and subventions explained
The loss offset (and subvention payment) mechanism allows a ‘profit’ company to reduce its taxable income by utilising the tax losses of a ‘loss company’. The mechanism is a great tool that is commonly used.
Before a loss offset can be made,Read more »

Markhams Otago held an exclusive seminar for its clients on 15 March on “What Does Social Media Hold for Businesses in 2018” where leading digital marketing expert Philippa Crick presented a one-hour informative session.
Social media has dramatically changed the way we interact,Read more »

We’ve just come back from our Continuing Education Conference, a stimulating and fun professional development weekend. We’ve caught up with our colleagues from around the country and have plenty of new knowledge to share with our clients. View our gallery of photos above.Read more »

A recent study found that up to one in five office workers enjoys going for a drink with co-workers at least once a month.
This begs the question as to whether after-work drinks are good for a person’s career. Although there is clearly no direct link,Read more »

The term ‘internet of things’ (IoT) is the name given to interconnected devices that can communicate with each other via the internet, through the sending and receiving of data.
The IoT is rapidly changing the world in which we live, albeit somewhat behind the scenes.Read more »

There is a growing trend for businesses today, whatever their size, to move to the ‘cloud’. The cloud is an online platform to make data and software accessible, anytime, anywhere and from any device.
Gone are the days of being chained to your desk in a small cubicle.Read more »

When an asset, such as a bach or a boat, is used both privately and to generate income, prescriptive rules exist within the Income Tax Act that determine the extent to which a tax deduction is available.
Expenses broadly fall into three categories: fully deductible,Read more »

The Labour coalition made immediate changes when elected into government, starting with repealing National’s planned tax bracket changes.
Labour’s new ‘mini-budget’ aims to benefit low-income earners, middle-income families with children and lift children out of poverty.
The package entails:

Increasing the Family tax credit by between $575 to $1,400 per year.Read more »

There’s been changes in the law around Easter Trading for store owners. While this may not affect you directly, please share this information with those you know – employer or employee – who may be impacted.
Amendments to the Shop Trading Hours Act 1990,Read more »

Businesses who ignore social media are losing out on what today has become one of the premium marketing channels. Markhams Otago is offering a chance to learn how to develop a clear social media plan to achieve results.
Free Seminar: What Does Social Media Hold For Businesses in 2018?Read more »

Money laundering is big business in New Zealand. Every year $1.35 billion of fraud and drug related money is laundered through seemingly legitimate businesses. In response, the Government introduced specific Anti-Money Laundering and Countering Financing of Terrorism legislation to address this risk.Read more »

IRD has been working hard to be easier to do business with. As you read this, its new tax system is kicking in, giving you new and simpler ways to manage your GST obligations through myIR.
Enhancements include the traceability of GST transfers,Read more »

In April, IRD will introduce payday reporting of PAYE information – that is, employers will need to report employee payments to Inland Revenue (IR) every pay run. To give you time to put systems in place, businesses will have a year before it becomes mandatory.Read more »

One of the first questions business owners ask when a new government enters power is what changes, if any, are coming in the area of tax.
Revenue Minister Stuart Nash provided a good steer on that when he addressed Chartered Accountants Australia and New Zealand late last year.Read more »

As a cash-dominated industry, ‘tradies’ have been under the watchful eye of Inland Revenue since 2012. A recently-launched media campaign warns tradespeople that doing ‘cash jobs’ may comprise tax evasion, and that every cash job leaves a trail (or lack of a trail) that can be tracked by IR.Read more »

In today’s fast-changing commercial environment, it is common for employers to provide board or accommodation to employees, and move staff to new locations based on the needs of the business – permanently moving an employee to a new location, or when temporarily seconding an employee to a different location.Read more »

The lead up to the election saw the condition of New Zealand’s housing stock hotly debated. Houses acceptable in the 1970s are now considered outdated and low quality for 21st century living.
With the introduction of a new Government, we are waiting to see what changes lie ahead for landlords,Read more »

Fifty years ago, farmers and others sprayed toxic chemicals onto weeds in blissful ignorance of the need for personal protective equipment.
How things have changed! Today, regulations govern the handling and use of all hazardous substances. And, like many other safety matters,Read more »

Recent changes to the code of ethics now provides guidance to assurance providers and accountants in what to do when there is non-compliance with laws and regulations (NOCLAR).
Essentially, it allows accountants to set aside their duty of confidentiality in the Code of Ethics when they come across non-compliance of laws and regulations – and alert the appropriate authorities where fraud,Read more »

It has been more than a year since new reporting standards became mandatory for registered charities in New Zealand. Chartered Accountants Australia & New Zealand has published a report that analyses the areas that have presented the greatest challenges in this first year of reporting under the new standards.Read more »

Education update
The Education (Update) Amendment Act 2017 (the Act) came into effect on 19 May 2017.
One of the changes in the new act is the clarifying of the board of trustees’ roles and responsibilities. There are three changes to the Act,Read more »

Real Estate Update
The REAA will soon change its name to the REA (Real Estate Authority). A new website and branding is currently in progress.
From 1 October 2018, The Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act will apply to real estate agents who
Represent a client who’s selling or buying real estate
Accept a deposit in cash of $10,000 or more from someone who’s buying real estate.Read more »

At the beginning of November 2017, the NZASB approved the new financial reporting standard, PBE FRS 48 “Service Performance Reporting”.
It applies to those Tier 1 and 2 Public Benefit Entities (PBEs – for example, not-for-profits and charities) with financial reporting periods beginning on or after 1 January 2021.Read more »

Do you hate it when GST return time rolls around? If so, you’re in good company. For many business owners, the pain isn’t so much having to hand money over to IRD, but having to prepare and file a return.
But that pain is easy to avoid.Read more »

While it’s easy to think of business culture as a bit soft compared with, say, achieving sales, in fact it’s anything but. A 2014 study reported that public companies named in a “Best Places to Work” list in 2009, outperformed the S&P 500 by 115 percent in the following five years.Read more »

Atul Mehta from Moore Stephens Markhams Chartered Accountants discusses tax implications that can arise from residential property sales. Download the article magazine in Contact November 2017 here.
The sale and purchase of residential property is an area of focus for IRD investigators because of the ongoing investment in the Property Compliance Programme.Read more »

It’s been compulsory since 1 July last year for any new tenancy agreement to include an Insulation Statement. That means landlords must record if rentals have insulation, where it is, the type of insulation and its condition. That allows tenants or potential tenants to make more informed decisions about renting.Read more »

Sometimes boats and aircraft are used for private and commercial purposes. In such cases, the income from their use may be liable for tax.
Boats and aircraft (valued at more than $50,000) become mixed-use assets if they are used privately sometimes,Read more »

If you are a New Zealander who is nearing retirement age, you will probably be starting to think about applying for New Zealand Superannuation.
If you have worked overseas there may be valuable information you should know before you complete the application process and sign any forms.Read more »

Inland Revenue (IRD) has recently released a new Taxation Bill and published the eighth discussion document in the Making Tax Simpler series; both aim to reduce the cost of tax compliance and administration for NZ businesses and individuals.
The IRD estimates that an additional $21 – $27 million of income tax revenue will be collected per annum under the new rules,Read more »

The sale and purchase of residential property is an area of focus for IRD investigators because of the ongoing investment in the Property Compliance Programme.
A Taxation Review Authority (TRA) case heard in May 2017, serves as a timely reminder for all property owners to remain aware of the tax implications that can arise from residential property sales.Read more »

Initially envisioned to be the preferred investment vehicle for foreign venture capital investors, the Limited Partnership (LP) was brought to life in NZ with the enactment of the Limited Partnerships Act 2008. LPs have now evolved into the preferred business vehicle for many who benefit from the limited liability of a company while acquiring a look-through entity for tax purposes.Read more »

Are you offering a spare room in your house, your whole house or a holiday home on Airbnb? You need to be aware that it will be subject to tax and possibly GST.
When Brian Chesky and Joe Gebbia came up with the idea of earning a bit of extra rent money income from letting out spare space in their loft apartment in San Francisco in 2007,Read more »

New Zealand’s immigration system is currently undergoing a significant overhaul, which is sure to impact many local businesses. Following the changes to Investor Category visas announced in December 2016, further changes are also proposed to the Skilled Migrant Category (SMC) visa,Read more »

With the persistent need for additional Government revenue it could be time to look to history for answers.
In 1535, King Henry VIII of England introduced the first ‘Beard Tax’ on males growing facial hair. The effectiveness of the tax in England was questionable,Read more »

With over 400 hours of content uploaded every minute, YouTube comprises a massive entertainment platform. The site has over 1 billion monthly users, with a continual demand for quality online content across a diverse range of subjects.
Armies of users produce and upload videos,Read more »

A tax bill passed in May made changes that affect cash flow.
Companies get more choice with RWT
From 2017-18, companies can choose to not deduct resident withholding tax on a fully imputed dividend paid to a corporate shareholder. A fully imputed dividend has a tax credit passed on because the company’s already paid tax.Read more »

The way contractors pay tax changed in April this year, giving greater choice, and making it easier to get tax right.
The rules around schedular payments have changed to allow this, and are compulsory for all contractors hired by a recruiter – or other labour hire business – and those previously under schedular payment rules.Read more »

Your business can’t survive without cash. In business, cash is king. The following six takeaways are essential for business success:
1. Protect your cash position, by knowing what it is. Build a cash flow statement and always keep it up to date.Read more »

A key principle of the tax system is that taxpayers should pay tax as income is earned. That doesn’t work well for businesses with seasonal or volatile incomes, and is why the Government announced, early this year, a new method for paying provisional tax.Read more »

The purpose of a business is to make money, and that means you must know the difference between profit and cash flow.
Net profit is what you have left after you deduct all your business expenses from all your revenue. You change net profit only by changing the things that affect revenue and expenses.Read more »

The tax deductibility rules around running a business from home changed on 1 April this year.
Under the new rules, the premises for a home business must be a separately identifiable part of the house, which is used mainly for business.Read more »

Atul Mehta from Moore Stephens Markhams Chartered Accountants discusses how new legislation enacted in February substantially simplifies obligations under the provisional tax regime. Download full article in Contact magazine July 2017 here.
Most taxpayers pay their provisional tax three times throughout the course of their financial year.Read more »

You know you have to get your debtors to pay, but do you understand the true impact of slow payers? Without a realistic picture of the direct and indirect costs of slow payment, your debt management practices may hurt your business.Read more »

We use images to tell a story in just about every part of everyday life; think children’s picture books, road signs or even emojis. Sometimes the purpose of that is to get a message across quickly. Sometimes it’s to help build meaning or association.Read more »

Like any relationship, timely communication between creditors and debtors goes a long way to avoiding trouble. One of those tools for small businesses is the financial web.
The financial web describes the growing electronic connectivity between small business, accountants and financial institutions,Read more »

There’s some talk that Facebook is on the way out and being replaced by other platforms like Snapchat or Instagram. But as with any business decision, consider the data – recent statistics show that Facebook has actually grown more in the last year than any year since 2012 (17 percent).Read more »

Before you follow up on debt, you want to be sure you supplied the right goods and services, in the right quantities, to the agreed standard, for the agreed price and within the agreed timeframe.
In collecting a debt, you must not use force or pressure,Read more »

The face of Auckland’s legal scene appears to be changing, with suburban and city fringe firms becoming more profitable than those in the city’s CBD traditionally thought to be the powerhouses.
This is one of the key findings of the latest financial performance survey released by accountancy firm,Read more »

Prime Minister Bill English officially opened Business HQ, Hastings, where our Hawke’s Bay office is located. Business HQ is home to a mix of accountants, engineers, architects, digital providers, property specialists, investment advisors, auditors, all with individual office spaces, working from the same location.Read more »

Using email campaigns as a form of marketing can be hugely effective. They help you maintain an element of rapport, simply by touching base regularly with your current clients. And it’s a great touch point to open a dialogue with prospects.Read more »

Many small to medium sized charities have filed performance reports with Charities Services for the first time. In its newsletter, Charities Services said that “Around 60 percent of charities in a sample checked have given the new standards a go.”
It is clear that there is still some way to go before all Charities meet their legal requirements.Read more »

Prepared by Barry Rosenberg Moore Stephens Markhams director and succession planning expert
Introduction
The Stoddart family has been farming in Porangahau, on the Central Hawke’s Bay coast for almost a century. The family’s roots are very deep in Porangahau.Read more »

It’s often considered taboo to ask other people how much they earn. So what would you do if you could look up how much your colleagues, neighbours and friends make, all legally, online and for free? Well this is what happens in some Nordic countries!Read more »

Moore Stephens Markhams tax specialist and business advisor, Kiran Bhikha shares his thoughts on the impact for business from this year’s Budget, see below.
With the announcement of Steven Joyce’s first budget, in an election year no less, we see a well-balanced budget,Read more »

The effective dates of three new accounting standards are fast approaching; these standards are referred to as NZ IFRS 9 Financial Instruments, NZ IFRS 15 Revenue from Contracts with Customers, and NZ IFRS 16 Leases.
These new standards will bring significant changes to how these items are recognised and disclosed in a for-profit entity’s financial statements.Read more »

Upcoming AML/CFT reform
The second phase of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) legislation is currently being developed by the government, with a bill expected to be passed by parliament in mid-2017. The law will come into effect in stages for different sectors between July 2018 and July 2019.Read more »

Businesses that heavily invest in Research and Development (R&D) commonly experience cash flow problems. This is because it can take years of sustained R&D before they come up with a marketable product or service that derives a profit. To help overcome this problem and encourage innovation in New Zealand,Read more »

A shared universal goal of all businesses is to maximise sales of products or services. To achieve this, business owners need to implement effective marketing strategies that focus on how to reach potential customers and make their products stand out from the competition.Read more »

The Commerce Commission has recently published an open letter to retailers highlighting pricing practices that may breach the law and offering guidance on how to avoid these.
The biggest complaint area received by the Commerce Commission last year concerned pricing, and currently this is a particular area of focus for compliance education and enforcement work.Read more »

It is very common for family owned companies to employ members of the family in the business on a permanent or casual basis. There is no problem with this per se, however income tax rules seek to prevent ‘excessive salaries’ being paid to family members.Read more »

New legislation enacted in February substantially simplifies obligations under the provisional tax regime.
Most taxpayers pay their provisional tax three times throughout the course of their financial year. Taxpayers with a March balance date for example will pay their provisional tax on the 28th August,Read more »

Safeguarding your network is a business priority. But as most of us are neither rocket scientists nor hackers, it’s hard to keep up with the constant turnover of computer security innovations. Most of us rely on our local IT gurus to keep our precious business information secure.Read more »

Where we choose to work from ends up being the one spot we spend most of our time. So why not make it comfortable and enjoyable?
It’s no news that being inspired is motivating, and that this in turn boosts productivity.Read more »

MEDIA RELEASE – 26 APRIL 2017

Three new Independent Directors appointed to HBRIC Ltd
The Hawke’s Bay Regional Council has appointed three additional independent directors to its investment company HBRIC Ltd, to help drive future economic development in the region according to Council Chairman Rex Graham.Read more »

There have been a raft of legislative and administrative changes recently introduced that will affect businesses. We are flagging these changes to you, and suggest that for advice particular to your business situation you contact a Moore Stephens Markhams advisor.

Transforming GST
Inland Revenue is rolling out changes to how New Zealanders file and manage their GST as part of ongoing business transformation.Read more »

We have so much information literally at our fingertips these days. As individuals, our days and nights are punctuated with the ping of social media updates. Businesses receive streams of layered information from news feeds, message boards and email. As a business owner you may now view your transactions on dashboards on a daily basis.Read more »

In an earlier article we looked at some of the techniques scammers use to harvest valuable information so they can hack your systems. Some of these scams use social engineering techniques to fool business owners and employees into revealing key business data.Read more »

Your business and your team are growing, and you can’t be everywhere at once. Sound familiar? It might be time to rethink your organisational structure.
Small businesses do well with flat structures. At their best there’s a friendly, informal, ‘just get on with it’ feel to them as the team deals directly with the owner.Read more »

Atul Mehta from Moore Stephens Markhams Chartered Accountants reminds rental property owners of their new obligations following changes to the Residential Tenancies Regulations. Download article in March 2017 Contact Magazine here.
If you gain income from rental properties, be aware that you need to comply with some new rules.Read more »

When you start googling to find an online shopping solution to suit your business, the good news is there’s a sea of choice out there: CS-Cart, Shopify, Big Commerce, 3D Cart, PrestaShop, Spiffy Stores, Shopping Cart Elite, Magento and many more.Read more »

Currently, companies that provide a motor vehicle for the private use of their employees must register for and pay FBT. Draft legislation has been introduced that will enable some small businesses to avoid having to pay FBT.
The proposed amendment will allow close companies (where five or fewer natural persons own 50 percent or more of the shares) that only provide one or two vehicles to shareholder employees (and no other benefits) to apply the rules currently available to sole traders and partnerships.Read more »

For most taxpayers, 31 March represents the end of the financial year. In the lead up to ‘year-end’, there are a number of actions that you, as a business owner or manager, may want to take to avoid missing the boat on simple tax planning opportunities.Read more »

Do you sell goods to Australia? If so, you may be affected by new Australian tax rules.
At present, goods valued under AUD$1,000 do not generally have Australian GST applied to them where they are sold into Australia directly to the end customer.Read more »

Moore Stephens Markhams Christchurch starts the New Year with some new beginnings and endings. It is with a heavy heart and fond wishes that we farewell Moore Stephens Markhams’ valued Directors Richard Ineson and Andrew Brady, who are both retiring at the end of the March.Read more »

As one door closes, so they say, another opens. With Andrew’s departure, the firm has offered a directorship to Ben Gilmour.
Over the six years Ben has been with the firm, he has grown his rural expertise to become advisor to most of our rural clients throughout the region.Read more »

Trusts are a popular way of protecting property and managing assets in New Zealand. The number of trusts we have in New Zealand is unknown, but estimates put the figure between 300,000 and 500,000.
The legislation governing NZ trusts has remained unchanged for decades as it has been predominantly governed by the Trustee Act 1956.Read more »

The internet is now the number one shopping destination globally, and not surprisingly. For customers, it’s ideal. There’s no need to get in the car and visit ten shops without finding exactly what you want. This way, it’s all in one place and you needn’t battle with other shoppers for the nearest and driest car park.Read more »

The Inland Revenue Department (IRD) recently released a new interpretation statement discussing when income from professional services is considered to be derived, and hence becomes taxable. The statement replaces several older IRD Information Bulletin’s and consolidates their view, giving greater detail and more examples.Read more »

Perceived tax avoidance by multinational companies has been attracting significant media and public attention. There is widespread concern that corporate structures and financing arrangements are being used to minimise worldwide tax bills.
A common example to illustrate the problem is where a business operates through companies in both New Zealand and Australia,Read more »

Dealing with customer complaints can be both gruelling and rewarding. But being able to turn the situation around so your customer is happy with the outcome can strengthen their loyalty to your brand and inspire some gold standard word of mouth marketing. Communication and attitude are as vital as expert product knowledge.Read more »

A recent case Taxation Review Authority (TRA) decision has highlighted the importance of good record keeping.
The taxpayer, an accountant, was accused by Inland Revenue (IRD) of using a company as a vehicle to create a tax advantage. He claimed to have sold his sole trade accountancy practice to his own company for $2m in 2002.Read more »

In order for your business to be a success, you need to be surrounded by like-minded people with good core skills and values, aiming for the same end goal. In essence, this is your dream team. But how do you ensure you’re recruiting the right team players?Read more »

The new auditor reporting standards are designed to enhance the independent auditor’s reports for investors, governance and other users of financial statements/performance report. They apply for balance dates on or after 15 December 2016.

We are writing to share the important news on the changes in the auditor reporting standards and how they will affect you.Read more »

Scams and scammers become more sophisticated every day. No surprises there. They rely on keeping a jump ahead of people. As businesses step up their investment in new technology and media platforms, scammers find new ways to worm their way in.Read more »

The word ‘sustainable’ seems to be thrown around on a regular basis these days, not just in relation to the food we eat, but also to business and the wider economy.
Sustainability in a work environment relates to an awareness of resources: how they are used and how we can conserve these resources to the benefit both of our environment and our pocket.Read more »

With the holidays coming up, you may have started to think about whether to employ some extra people over the holidays. If you do, think carefully about the kind of help you need and broadly what kind of employment contract is best suited to the situation.Read more »

Do your plans for the festive season include functions to celebrate with clients and the team? What about gifts? If they do, here are some tips on the tax implications.
Entertainment
When you’re entertaining clients or colleagues, some entertainment expenses are tax deductible while others aren’t.Read more »

The rule of thumb with gifts is that if they consist of food or drink, you can only claim 50% of the expense as a tax deduction. If you are giving out gift baskets or hampers and some of the contents are food or drink,Read more »

If you gain income from rentals, be aware you need to comply with new rules. These changes aim to make homes warmer, drier and safer for hundreds of thousands of New Zealanders.
Insulation
On 1 October 2016, changes to the Residential Tenancies Regulations came into force to reflect new standards on insulation.Read more »

As we come to the close of 2016, the last ten months has seen many businesses across New Zealand face a variety of sometimes overwhelming, but always unique, challenges.
Through this, the ability to engage and retain valuable employees remains a critical risk for all,Read more »

Irrespective of the size of a business, one of the challenges for any business owner is to be able to attract and retain talented staff.
One means of doing so is an effective remuneration package that motivates staff in a way that aligns their performance with the owner’s business objectives.Read more »

Over the past few years there has been a pronounced improvement in the manner in which Inland Revenue selects and conducts its investigations.
There has been an increased focus on data analysis, comparisons to statistical norms, and the use of external information such as land transfer data.Read more »

Technology and change is prevalent across all areas, right through from the supply chain to the customer. Computers are no longer isolated assets; complex cloud based systems allow all areas of an organisation
to be truly digital.
Although this can have many benefits,Read more »

Nothing is certain, except death and taxes…
Benjamin Franklin’s well known phrase does however appear to come as a surprise to some people.
Although tax returns across the world need to be filed annually, taxpayers come up with a variety of creative and ingenious excuses to try and avoid late filing penalties.Read more »

The Ministry of Justice is looking to extend the application of anti-money laundering compliance obligations to more businesses and professions.
In a nutshell, since 2013 only financial institutions and casinos as well as the government agencies tasked with overseeing and enforcing the rules had to comply with the anti-money laundering legislation.Read more »

The IRD have long permitted a straightforward concession allowing a flat 25 percent deduction for farmhouse expenses, as well as 100 percent deductions for interest and rates. The concession is not legislated and dates back to the 1960s, when farm ownership and operating structures were generally less complicated than they are today.Read more »

A recent Supreme Court decision, Trustpower Limited v Commissioner of Inland Revenue (IRD), has drastically changed how New Zealand businesses should treat feasibility expenditure for tax purposes.
Feasibility expenditure is a term used to refer to expenses incurred in the course of determining whether to acquire an asset;Read more »

You will have heard ads on the radio from Inland Revenue raising awareness on their initiatives to change the administration of the tax system.
Inland Revenue have been working on this for a while, taking into consideration many submissions from different sources.Read more »

Fraud involving unauthorised payments has been in the news a lot lately. Therefore, it is a good time to review your entity’s payment and approval process. We have prepared a few tips for you to consider:

Have two or more people approving payments (whether by cheque,Read more »

For organisations with balance dates on or after 15 December 2016, you will notice a change in the format of your audit report. This is due to a change in the international auditing standards governing audit reports.
According to the IAASB,Read more »

An area we notice that often confounds clients is how to calculate GST deductions on assets that are partly for business use and partly for private use. You can claim GST but only in proportion to the extent the asset is available for producing income.Read more »

Jonathan Roberts from Moore Stephens Markhams Chartered Accountants compares the different ways to pay your tax following the Government’s recent changes to provisional tax. Download the article in Contact November 2016
Earlier this year, the government announced there would be some changes to provisional tax.Read more »

We spend most of our lives working rather than with the ones we love, so it seems only sensible to ensure the relationships we have at work with our colleagues or employees are healthy and happy, as well as professional.
It’s not about suddenly spending time together outside of work,Read more »

You’ll often hear the terms cash or accrual accounting. Is this when you tune out? They’re the two main methods of keeping track of income and expenses. They work in different ways so it’s good to understand how your financials are put together.Read more »

How often do you look at the Profit and Loss (P&L) statement for your business? Only once a year? It could be more useful to monitor it more often.
Your P&L statement gives you a great way to keep an eye on how your business is doing.Read more »

No one looks forward to dealing with a complaint from an unhappy customer. It’s uncomfortable and confronting and it’s hard not to react when someone is rude or angry.
The customer might be unhappy about the product or the service. Sometimes it’s as clear-cut as a product defect.Read more »

Proposals to change the rules governing look-through companies (LTCs) and closely held companies are currently going through parliamentary hearings and consultations. If passed, the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill is expected to take start taking effect from the 2017 tax year.Read more »

We have long known we’re a nation powered by small business. And that lends itself to highly personalised ways of doing business, strong relationships going back a long way, teams that feel like family.
That’s why it’s so devastating when a business finds out someone they’ve trusted has cheated them,Read more »

It is taking time for the impact of this year’s employment law changes to sink in. Parental leave and the demise of zero hours contracts received a lot of press. Enforcing employment standards has had some coverage but always sounds a bit abstract in comparison.Read more »

As of 1 October 2016 non-resident businesses must charge and return GST where they meet the criteria to register for GST and they supply remote services (including online services) to New Zealand residents. As a New Zealand resident business, you won’t be charged GST on these supplies,Read more »

In the vast majority of cases fringe benefit tax (FBT) on vehicles is paid based on the GST inclusive cost price of a vehicle. But it is worth considering application of the depreciated tax value (TV) method if you have older vehicles on which FBT is being paid.Read more »

In May 2016, the Government introduced the Taxation (Annual Rates for 2016 – 17, Closely Held Companies, and Remedial Matters) Bill (the Bill). Some of the key changes proposed in the Bill are outlined below.
Tainted capital gains
Capital gains derived by a company from the sale of a capital asset are able to be distributed tax free on liquidation.Read more »

In today’s global economy a country’s tax regime is an important determinant when businesses are deciding where and how much to invest. Recent research ranked New Zealand’s tax system number two in the world for tax competitiveness. This isn’t surprising given NZ’s broad based low rate regime and the fact we don’t have estate duty,Read more »

When you look at your numbers, do you see how you’re doing? Do you see how close or how far away the business is from realising your goals? What are you measuring that will tell you whether you’re racing or just revving the engine?Read more »

What do you do when you’ve been through all your incomings and outgoings for the quarter and you’re running at a loss? It can give you the flutters but it’s not uncommon for business owners to find themselves in this position,Read more »

So… you’d like to implement a leadership development programme but aren’t quite sure where to start?
Start with your business’ strengths and weaknesses in terms of succession.
Your backup
If your business has a pretty flat structure, and you are the key person,Read more »

Imagine being able to step away from your business and take a much needed holiday. What if you had the chance to work minimal hours, or even none at all? Before you take that step, you need to be confident the business will stay on track.Read more »

Directors Paul Rickerby, Christchurch and Dan Druzianic, Hawke’s Bay, have been sharing what they learned from an intensive week-long programme at the Harvard University Business School with their teams, clients and colleagues. Here Dan is featured in Hawke’s Bay Today sharing some of those insights.Read more »

Like the bumper stickers say: be the change you want to become. How to attract great people to you and how to keep them: the challenge is to become an employer of choice. The rewards lie in a great team who identify with your values and vision,Read more »

When you look at your numbers, do you see how you’re doing? Do you see how close or how far away the business is from realising your goals? What are you measuring that will tell you whether you’re racing or just revving the engine?Read more »

Stress is a sneaky wee thing. It can creep up on you completely unaware, knocking you down when you least expect it. If you’re busy it’s easy to forget to look after yourself. It is all too easy to let things get on top of you.Read more »

We live in a world in which more people are connected than ever before. Smartphones, tablets and laptops are now integral to our everyday lives. How is your business faring in the digital universe? Make sure that your business’ digital footprint is still stepping out even when you’ve closed up and gone home for the day.Read more »

Atul Mehta from Moore Stephens Markhams Chartered Accountants discusses the rules and entitlements around working as an independent contractor.Download the article in Contact Magazine August 2016 here.
When you work as a locum pharmacist, you generally work for more than one pharmacy on an irregular basis to help out with the short term needs of those pharmacies.Read more »

Are you selling residential land? From 1 July 2016, a new withholding tax – residential land withholding tax (RLWT) – may need to be deducted from a property sale/disposal where the property being sold/disposed of is in New Zealand and meets the definition of ‘residential land’,Read more »

For many business owners in New Zealand the process of filing an income tax return online involves many steps, and the alternative – paper returns – can be time consuming.
Inland Revenue is looking at an idea that could mean small businesses won’t need to complete a tax return ever again.Read more »

In this connected world we live in, 24-hour work access can be both a good thing and a bad thing. Working from any place you like with Wi-Fi means you can read that report sitting on the beach or take a Skype call at the bottom of a ski slope,Read more »

In a recent article in the Harvard Business Review, David Novak talks about recognition deficit, or, in simple terms, not giving your team enough recognition for the role they do.
People should bring value to your business, or else they should not be working for you,Read more »

If you are putting a referral plan together, it’s important to look at the longer term rather than the initial cost to set one up. Here’s an example:
Say you decide to give a bottle of wine away to each client that refers someone on to you.Read more »

Every time you touch another person – whether it be by email, through your recruitment process or as a supplier or customer – the brand of your company leaves an impression on them. That could be a good one, a bad one or a neutral one.Read more »

Tax pooling is a service designed to reduce interest costs and provide payment options for provisional taxpayers.
How does it work?
For underpaid income tax, you can settle what you owe IRD by paying through a tax pooling intermediary such as Tax Management NZ (TMNZ) at an interest cost lower than the interest IRD charges on underpaid tax.Read more »

Content marketing is probably something you have heard of but perhaps you’re not really sure where to start. You know it’s supposed to drive sales but surely the ads you put in the local paper and on various websites do that,Read more »

“I didn’t have time to write a short letter so I wrote a long one instead.” Mark Twain
If you look at your inbox, are the emails that have hung around still to be dealt with the long and wordy ones?Read more »

Many great business leaders have inspired us through their quotes – we’ve picked out some of the most poignant ones and added a little context for your business. See what resonates with you and take action.

“There is nothing so useless as doing efficiently that which should not be done at all.” Peter Drucker
Is your business guilty of continuing to do something because it’s always been done that way,Read more »

The wine industry is very international and, as such, has many workers entering New Zealand to work and live, and many New Zealand workers who go overseas to work within the industry. What are the key tax issues to consider when moving country?Read more »

Atul Mehta from Moore Stephens Markhams Chartered Accountants talks about the importance of declaring cash jobs with IRD and how to keep accurate business records. Download the article from June Contact magazine here.
Cracking down on undeclared cash jobs
The Inland Revenue Department (IRD) has recently published their new,Read more »

Mike Flower and Emma Holmes from Moore Stephens Markhams Wairarapa recently took part in the Chartered Accountants Association Australia New Zealand (CAANZ), Meet the Business Leaders programme in Wellington on 13 May 2016.
Business leaders ‘hot-seated’ around tables of year 12 and 13 accounting students from the lower North Island in 10 minute sessions,Read more »

An Australian man has been unsuccessful in his attempt to claim a deduction of AUD$5,388 in relation to a salary that he paid his son for secretarial services.
The deduction was denied on the grounds that his son was seven and a half years old and did not in fact provide secretarial services to his father.Read more »

The compulsory zero-rating of land rules has applied since 1 April 2011. The rules were introduced to combat a pattern of transactions where Inland Revenue (IR) was paying GST refunds to land purchasers, but there was no corresponding GST returned by the vendor.Read more »

Welcome Eddie
We would like to introduce you to Eddie Cranston, the newest addition to the team here at Moore Stephens Markhams Wairarapa.
Born and raised in Taihape, agriculture played a large part in Eddie’s upbringing. Along with helping on his small family farm,Read more »

On 4 April 2016, the New Health and Safety at Work Act 2015 (HSWA) came into effect. All workplaces are now covered by the HSWA. The key emphasis of the law is on everyone in the workplace (the employer, workers, unions,Read more »

The Employment Standards Legislation Bill came into effect on 1 April 2016.
The aim of the bill is “to promote fairer and more productive workplaces by providing enhanced protections and benefits for both employers and employees”.
“Specifically the bill:

Extends parental leave and payments to more workers and increases the flexibility of the parental leave scheme through amendments to the Parental Leave and Employment Protection Act:
Provides for stronger and more effective enforcement of employment standards (such as the minimum wage and holidays entitlements) through amendments to the
Employment Relations Act,Read more »

New Research & Development Loss Tax Credit for companies
Eligible companies are now able to obtain a research and development (R&D) loss tax credit that will allow them to some of their tax losses sooner. Eligible companies can now ‘cash out’Read more »

Inland Revenue has signalled it will be looking at businesses’ record keeping systems. Key targets will be that all jobs and all income are being recorded and that GST is being handled properly.
Recent prosecutions indicate that PAYE records are another hot topic,Read more »

There has been plenty written on the new Financial Reporting framework and its effect on the reporting and audit requirements for Companies and ‘Public Benefit Entities’ – namely charities.
So where does this leave incorporated societies who are not registered charities?Read more »

Quite often when you work as a locum in a pharmacy you are doing so for a number of pharmacies. Locums in this situation are generally treated as independent contractors for tax purposes which means that PAYE tax is not deducted from the earnings received like it is for general employees. The difference between an independent contractor and employee has been a contentious one in the past so to ensure that all parties are clear about the status we recommend that an agreement be entered into between the parties stating that the locum work is being carried out by an independent contractor responsible for their own taxes and costs. Generally this can be a simple one page document.Read more »

So you want to be a top performer? You can, and as author Paul Rulkens writes in his book The Power of Preeminence, it starts with a mindset that translates into things that you do.
There are twelve habits that make a top performer:

Atul Mehta from Moore Stephens Markhams Chartered Accountants talks about the implications of the new Health and Safety at Work Act and what this means for employers and staff. Download the article in Contact April 2016 here.
The new Health and Safety at Work Act came into force on 4 April 2016.Read more »

Athletes do it, writers do it, actors all do it – they take time to recover after a big event or project, and you need to do the same. “But I’m running a business daily, how can I do that?” you ask.Read more »

Setting the right price for your product or service is hard because it has such a big impact on the company’s bottom line. A huge part of pricing is understanding price elasticity.
Most customers are sensitive to the prices you set. You need to understand how elastic,Read more »

Very often similar services share space in the same building, such as chiropractors, doctors, dentists and physiotherapists. They do that on purpose, because if you care enough about your general health, you’ll probably care just as much about your feet or your teeth.Read more »

We’ve all heard of the ‘Law of Reciprocity’ but Wayne Baker at the University of Michigan, along with his wife Cheryl, has developed the reciprocity ring.
It’s simply a group of people who get together regularly to help one another by using their networks and resources to find a solution to a given problem.Read more »

Strictly Savvy – Supplier profile
We continually tell our clients to embrace technology resources to help improve and grow business. At Moore Stephens Markhams Wellington we have. Learn how a virtual assistant service helps director Bruce Stormer focus less on admin and more on clients’ success.Read more »

Over its 104 year history, the firm that is today called Moore Stephens Markhams Hawkes Bay, has had many changes of people and location. 2016 sees the latest of these.
Our Hastings office has moved to a purpose-built suite of offices and meeting rooms on the former Bay Ford car yard in Hastings,Read more »

From 1 April 2016, there are further changes to paid parental leave.
The amount of paid parental leave that eligible people can take will be extended from 16 weeks to 18 weeks.
Parental leave payments will also apply to more workers.Read more »

Employers are required to pay FBT on non-cash benefits provided to staff. However, like most taxes, there are exemptions. It is important to be aware of the exemptions to ensure FBT is not overpaid. One such exemption provides that benefits (other than travel,Read more »

Compliance with student loan repayment obligations remains a continued focus for IRD and the Government. IRD currently estimates that $3.2billion is owed by student loan borrowers who are currently living overseas, the majority of whom reside in Australia.
In November 2015,Read more »

Whether it is our waistlines or our bank balance, we tend to find ourselves in recovery mode after Christmas. However, for those living in Norway they don’t find this to be as much of a problem as we do.
In November each year,Read more »

The manner in which we interact with Inland Revenue (IRD) is likely to change dramatically over the next two years as the upgrade of IRD’s IT system and associated legislation comes on-line. IRD’s broad objective is to reduce the amount of time and cost it and private business spend on tax administration by modernising its software platform.Read more »

The Australian Taxation Office (ATO) has shamed large corporates by publishing revenue and tax information of more than 1,500 companies with reported total earnings over A$100 million (US$72.11 million) for the 2014 tax year. Of these companies more than a third paid no tax according to the ATO,Read more »

Business structuring
When establishing a business, there are a number of considerations to take into account when determining the ideal structure to adopt. One such consideration is protection of assets – not just the assets of individuals who invest in the business,Read more »

Much can be achieved when a team of people has absolute focus on a particular goal, almost to the point where other things don’t matter.
Indeed, the National Outdoor Leadership School (NOLS) calls real focus Expedition Behaviour, and when you think about how a group on a snowy expedition has to perform together,Read more »

Pharmacies’ profits have plummeted by more than $28,000 in the past year, despite dispensing thousands more prescriptions, according to just-released figures.
Accountancy firm Moore Stephens Markhams released its third annual Pharmacy Benchmarking Survey, at a launch event come Christmas party in Auckland last night (30 November).Read more »

Inland Revenue have signaled they will be looking at businesses’ record keeping systems. Key targets will be that all jobs and all income are being recorded and that GST is being handled properly. Recent prosecutions indicate that PAYE records are another hot topic,Read more »

Inland Revenue’s crackdown on ‘cashier’, cash jobs, and under the table jobs continues, with their focus on undeclared cash in the construction and hospitality sectors. Last year, the Auckland region saw the most activity. Inland Revenue are now widening their reach.Read more »

Wouldn’t it feel great if you could increase your profit by 25 percent this year?
In today’s ever-changing market, you need to be constantly monitoring your business performance and developing new strategies to achieve growth. You can no longer expect to continue to do what you’ve always done and achieve the same results.Read more »

Innovation is something many companies struggle to do despite knowing it’s important. Just how do you become a world leader, create an innovative system or design and lead the way for others to follow? If someone hadn’t innovated and created shipping containers,Read more »

Businesses performing well recognise the opportunities that lie within its office walls… your key staff!
Developing a healthy, sustainable company culture will prove a valuable investment, helping you to retain, motivate, and propel key team members and your business. It all starts with strong values and capable leadership.Read more »

All vendors and purchasers of property other than their main home must now provide an IRD number as part of the land transfer process.
Non-residents
Offshore buyers must provide a New Zealand bank account number before they can obtain a New Zealand IRD number.Read more »

The amount of people wanting the answer to ‘how do you do that’ is growing, with searches using the term ‘how to’ on YouTube increasing 70 percent year on year.
When your customers and prospects look for answers, they will often turn to a device for the answer.Read more »

Many jobs provide absolutely no contact at all with the people that benefit from the work; some medical professionals provide critical diagnoses without ever meeting the patient.
In Israel, a group of radiologists evaluated nearly 100 CT scans without ever seeing the patients.Read more »

“Pour yourself a drink, put on some lipstick and pull yourself together.”Elizabeth Taylor
For many, the holidays are now well and truly over and the stark reality of being back at work is hard. With the sun shining brightly outside,Read more »

Atul Mehta from Moore Stephens Markhams Chartered Accountants talks about the results from this year’s Pharmacy Benchmarking Survey. Download Contact December / January 2016 here
Once again it is time to discuss our annual Pharmacy Benchmarking Survey, which was published on 1 December 2015.Read more »

MEDIA RELEASE
2 December 2015
Pharmacy report 2015 shows rise in wages and drop in gross profit margins
It has been a challenging time for many pharmacies over the last few years and the latest Moore Stephens Markhams pharmacy survey shows that it’s not over yet.Read more »

Moore Stephens Markhams Hawkes Bay is soon to say goodbye to our offices of 16 years in King Street. In early January we will be relocating to the new Business HQ, located at the former Bay Ford site on the corner of Hastings and Queen Streets.Read more »

Moore Stephens Markhams Wairarapa has been supporting accountancy in local high schools for six years, with a scholarship at end of year prizegivings to top accounting scholars.
This year’s Moore Stephens Markhams Wairarapa Accounting Scholarship was awarded to Vishwas Singh.
Jo-Anne Bissett,Read more »

One of the pitfalls many business owners face is getting caught up in doing everything IN the business and not spending any time ON it. It falls further and further down the list, so tasks pile up that could – if tackled –Read more »

ACC must collect sufficient funds to cover the costs of all current and past claims. In 1999, the Government realised funding was insufficient to cover on-going costs of pre-1999 claims and therefore, introduced a ‘residual levy’ to build up adequate funds.Read more »

In the past, an Inland Revenue Department (IRD) audit could be commenced for no other reason than the business had not been audited in recent years. Audits would start with the stereotypical interview comprising a series of broad questions that may or may not apply to the business,Read more »

Imposing Goods and Services Tax (GST) on the digital economy has been a hot topic this year as New Zealand retailers push for equal GST treatment between local and foreign suppliers.
At present, foreign providers of cross-border services and intangibles (including music,Read more »

What is a fixed asset?
A fixed asset is something tangible and used in the business that is expected to have a useful life of more than 12 months.
What is depreciation?
Depreciation is a method of allocating the cost of a tangible asset over its useful life.Read more »

Historically pharmacies have been valued using the Earnings Before Interest and Tax (EBIT) multiple method, where an appropriate multiple is applied to a pharmacy’s EBIT.
A number of methods can be used to value a small to medium sized enterprise and different industries have certain types of values and methodologies that are preferred.Read more »

We read a lot about the ageing population and its potential impact on the economy but what does it mean for small business?
In business, typically, it takes a lot of energy and planning to get started and a lot to keep going and keep growing.Read more »

Much like cold calling, asking for referrals can seem daunting. However unlike cold calling, referral business usually comes off the back of having done a good job for someone, so you’re already on the front foot. The first step is asking for the referral.Read more »

Charities: items to consider
With the new financial reporting standard changes coming into effect for public benefit entities with balance dates commencing 1 April 2015, we’ve listed a few things your governing board and financial statement preparer should consider:

A reminder of the legal requirements from the Companies Act 1993 (section 189). The Act requires that a company must keep the following documents at its registered office:

The constitution of the company
Minutes of all meetings and resolutions of shareholders within the last seven years
An interests’ register
Minutes of all meetings and resolutions of directors and directors’ committees within the last seven years
Certificates given by directors under this Act within the last seven years
The full names and addresses of the current directors
Copies of all written communications to all shareholders or all holders of the same class of shares during the last seven years,Read more »

General purpose financial statements (GPFS) are financial statements that are prepared in accordance with generally accepted accounting practice in New Zealand.
For FMC reporting entities, GPFS must be prepared under the requirements of New Zealand equivalents to International Financial Reporting Standards (NZ IFRS);Read more »

As part of our continuing growth we are pleased to announce the appointment of new team members.
Wellington AuditMichael Rania joins the Moore Stephens Wellington Audit partnership on 1 October 2015, and brings with him a team of three experienced auditors: Simon Smith,Read more »

A review of a sample of our trust files indicates that in some cases there are significant administration and documentation gaps. It is also possible that some trustees may be unaware of some or even all of their responsibilities in that role.Read more »

Hamish Pringle congratulates Caleb Dennis, Craggy Range Winery, Hawke’s Bay’s Young Vit winner in 2015 and the Young Viticulturist of the Year 2015 awards. Caleb moves on to the national Young Horticulturist of the Year competition being held in November. Moore Stephens Markhams is a regional sponsor of this event.Read more »

A new initiative, dubbed ‘tax inspectors without borders’ has been launched to help poor countries crack down on tax avoidance and fund their own development.
According to policy research group, Global Financial Integrity, nearly US$1 trillion is estimated to leave poor countries each year in illicit finance,Read more »

Fonterra’s latest estimate of the dairy payout for the 2015/16 season is $3.85/kg milk solids. This comes off a record $8.40/kg for the 2013/2014 season. It is estimated the average dairy farmer needs $5.60/kg of milk solids to breakeven, so it goes without saying that financial upheaval is coming,Read more »

The Reserve Bank of New Zealand uses the Official Cash Rate (OCR) to maintain price stability, i.e. to keep inflation between one percent and three percent over the medium term.
Given the recent drop in the OCR (from 3.5 percent to 3.25 percent) and the potential for future reductions,Read more »

Inland Revenue has won an appeal against Trustpower involving the deductibility of feasibility expenditure.
The Court of Appeal has ruled that $17.7m of costs incurred to investigate and apply for resource consents are non-deductible, even though the costs were incurred before any decision was made to proceed with the project for which they were being acquired.Read more »

New Zealand accounting software company Xero has recently made Moore Stephens Markhams a Platinum Partner.
Xero recognises and contributes to the high level of expertise that the New Zealand group has in this software, with over 1000 clients being users.Read more »

There is currently significant public interest in the New Zealand housing market, whether it be issues relating to the Auckland ‘bubble’, property speculation, non-resident buyers, banking restrictions or a combination of these.
In response, the Government is introducing a number of changes designed to either directly influence the market,Read more »

Moore Stephens Markhams tax specialist and business advisor, Belinda Canton outlines the impact for business from Budget 2015.

Rumoured to be the most boring budget in years – and on that basis we were not disappointed. All eyes were on Bill English to see what strategies the government had in store this year for saving money,Read more »

Of all the weird and wonderful taxes imposed around the world, it was surprising to find one in our own backyard.
New Plymouth sports clubs pay tax on the number of toilets they have. This ‘pan tax’ is imposed by the council and is effectively a sewer charge.Read more »

Use-of-money interest – the rates on underpaid and overpaid tax rose on 8 May 2015. The interest rate charged on underpaid tax went from 8.40 percent to 9.21 percent, and the rate for overpaid tax rose from 1.75 percent to 2.63 percent.Read more »

On 26 February 2015, the Government introduced the Taxation (Annual Rates for 2015 – 16, Research and Development, and Remedial Matters) Bill (the Bill). It is the first sizeable bill to introduce amendments to the tax rules since November 2013.Read more »

A recent High Court decision, Lewis Holdings Ltd v Steel & Tube Holdings Ltd (2014), demonstrates that structuring a business or entering into new business ventures through separate companies to ring fence risk may not always be as effective as people think.Read more »

Each year on average, 75 people die on the job and 1 in 10 people are injured at work. With statistics this bad, it’s not surprising the Government is reforming New Zealand’s health and safety landscape.
A new Health and Safety Reform Bill (the Bill) is currently before Parliament and is expected to pass later this year.Read more »

Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income.

Generally you must claim depreciation on fixed assets used in your business that have a lifespan of more than 12 months. However in special circumstances you can elect not to depreciate an asset by applying to the IRD.Read more »

GST is a tax on the supply of goods and services in New Zealand by a registered person on any taxable activity they carry out. The current rate is 15%, please note though it can be zero-rated for exports.

GST registration is required if the annual turnover of the business for a 12-month period exceeds or is expected to exceed $60,000.Read more »

A general rule of thumb to go by is similar to bricks and mortar. If you are selling a product within New Zealand, the standard GST rate of 15% is chargeable. If you are exporting the goods, either physically or digitally you need to keep proof of destination to allow zero-rating –Read more »

The KiwiSaver scheme is a New Zealand voluntary long-term savings scheme which came into operation from Monday, 2 July 2007.
The main purpose of the KiwiSaver fund is for retirement savings, but younger participants can also use it to save a deposit for their first home.Read more »

Pay As You Earn (PAYE) is the basic tax taken out of your employees’ salary or wages. The amount of PAYE you deduct depends on each employee’s tax code. Understand the basic ins and outs by following the steps below:

Provisional Tax is not a separate tax but a way of paying your income tax as the income is received through the year. You pay instalments of income tax during the year, that have been calulated on what you expect your tax bill to be.Read more »

Resident Withholding Tax (RWT) is a tax deducted on interest earned from investments and bank accounts. The investment organisation or bank deducts this tax when they credit interest to you. Companies may also deduct withholding tax from dividends paid to shareholders.Read more »

Individually, rather than a company, you may be eligible for tax credits. Remember always to keep your receipts. Read below for more on eligibility and what you can claim on to receive your tax credits.

Firstly, tax credits can be claimed by individuals (not companies,Read more »

Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid such charges, you need to pay the full amount of tax you owe by the due date. This is cut and dry. If you pay late,Read more »

Working for Families tax credits are available to families with dependent children aged 18 years or younger.

These are refundable, meaning that if the credits exceed the person’s income tax liability they are able to be refunded to the taxpayer. Inland Revenue administer the Working for Families tax credits,Read more »

Under the Companies Act, shareholders generally have rights attached to shares, and under the company’s constitution shareholders’ rights can be negated, altered or added to. A company can have different classes of shares with different rights to vote or receive dividends.Read more »

Do you have income from rental? You may be wondering about why ACC collects levies from rental income.
It comes down to whether your rental income is classified as ‘active’ or ‘passive’. ACC levies active rental income but not passive rental income.Read more »

When Peter Smith retires as a director of Moore Stephens Markhams Wellington Limited at the end of March, it will mark both an ending and a new beginning for us.
For Peter, it will be the conclusion of a long and stimulating accountancy career that has spanned almost five decades,Read more »

Loyalty schemes are on the rise and popular with both businesses and customers. Recently in the retail sector there has been a rapid increase in gift voucher and gift card schemes based on reward points or similar.
Unfortunately all to often these schemes are not properly implemented.Read more »

A recent Taxation Review Authority (TRA) case concluded an individual was a New Zealand tax resident despite being absent from New Zealand for a long period of time. In brief, the decision was a consequence of having an investment property that was ‘available’Read more »

An easement gives a person the right to use another person’s land in a particular way, or to prevent that other person from using their land in a particular way. Historically, amounts received by a landowner to grant an easement have been treated as taxable under section CC 1 of the Income Tax Act 2007.Read more »

Business structuring – Whether you are starting a new business or looking at expanding your existing business, deciding on the commercial structure to adopt can seem daunting and the help of an advisor is likely to be sought. Irrespective of that help,Read more »

Despite our best efforts, many of us are familiar with the consequences of making late tax payments to the IRD. Often, the problem is not just that we forget and leave it to the last minute, but that the payment we make is not processed or received by the IRD in time.Read more »

Gambling Amendment Bill (No 3)
Of interest to our clients with gaming machines, the Gambling Amendment Bill (No 3) completed its first reading on 6 November 2014 and is now being considered by the Government Administration Committee.
The bill proposes amendments to the Gambling Act to increase transparency of grant-making from the proceeds of Class 4 gambling;Read more »

An organisation’s payroll function can be a confusing and time consuming task, but there is a range of options available that can help. Rather than battling away in isolation, an organisation could consider acquiring an appropriate software package, using a third party payroll contractor or outsourcing the payroll function to an internet-based provider. Choosing the right option will inevitably be a case of balancing the cost of each option against the advantages to be gained. The main options are outlined below.Read more »

Many businesses continue to struggle in the current economic conditions and for some, a decline in revenue through a sudden loss of custom could be quite damaging. As such, the unexpected resignation of an employee who has strong customer relationships could potentially jeopardise the business,Read more »

The Taxation (Annual Rates, Employee Allowance, and Remedial Matters) Bill was enacted on 30 June 2014. One of the notable changes included in this Act included amendments to clarify the tax treatment of employer provided accommodation, accommodation allowances and other reimbursing payments made to employees. Most of these changes will come into effect on 1 April 2015.Read more »

Our daily lives are full of routine: routine from the moment we get up, and generally until we go to sleep again at night. Yes our days can vary – customers seen, problems solved and presentations delivered – but generally our lives follow the same path each working day.Read more »

As discussed in previous issues of Audit News, for balance dates commencing 1 April 2015, charities (registered with Charities Services, under the Charities Act 2005) will be required to prepare financial statements in compliance with financial reporting standards issued by the External Reporting Board (XRB).Read more »

The Financial Reporting (Amendments to Other Enactments) Act 2013 came into effect on 1 April 2014. The Act outlines the substantive changes to the financial reporting requirements of entities operating in New Zealand and includes consequential amendments to other legislation such as the Companies Act 1993 and the Financial Markets Conduct Act 2013.Read more »

Overview
Effective for periods beginning 1 January 2017 (early adoption is permitted) the New Zealand equivalent of IFRS 15: Revenue from Contracts with Customers will provide a single source of requirements for accounting for all contracts with customers (except for some specific exceptions,Read more »

The ETS started in 2008 following an amendment to the Climate Change Response Act 2002 (the Act). The Act has been revised since its introduction in 2008, with the Climate Change Response (Emissions Trading and Other Matters) Amendment Act 2012 (the 2012 Amendment Act) being the most recent revised Act at present.Read more »

Depending on the election outcome, after 20 September 2014, New Zealand may join other developed countries and introduce a ‘capital gains tax’ (CGT).
CGT is on the agenda of several political parties. Where the general left / right divide sees National,Read more »

Auditors are often guilty of assuming that everyone knows what they do. In reality, most people don’t understand much about what an audit is or what an auditor does. In order to clear the fog around the mysterious world of audit,Read more »

Changes to Charities annual return requirements
From 1 July this year, an Annual Return filed with Charities Services is not recognised as complete until payment is received. This only applies to charities with a total gross income over $10,000.
New legislation brings in fines for not complying with audit requests
The new Financial Reporting Act 2013 requires that entities specified in the Act must ensure that auditors have access at all times to the accounting records and other documents of the entity.Read more »

The accounting standard changes that will affect those entities for periods beginning 1 January 2013 onwards have been updated on the XRB website and some key elements are noted below.
Consolidated financial statements
The issue of NZ IFRS 10 Consolidated Financial Statements has replaced those parts of NZ IAS 27 (Separate Financial Statements) which address the requirements of preparing consolidated financial statements. NZ SIC-12 Consolidation – Special Purpose Entities has also been replaced in its entirety.Read more »

Over recent years there has been a sense of déjà vu through the Budget cycle where we have seen a pattern of minor change and tweaks, with a ‘steady as she goes’ approach. Given the upcoming election and the fact the 2014 Budget was potentially National’s last,Read more »

The new Employment Relations Amendment Act 2010, which came into effect on 1 April 2011, extended the 90 day trial period to all employers; prior to the amendment only those with fewer than 20 staff qualified.
The Employment Relations Act legislation requires that in order for a trial period provision in an employment agreement to be valid,Read more »

The salary you set must balance the recruit’s expectations with your business’ profit.

What is your budget? What can you honestly afford? Bearing in mind you’ll need room for pay increases down the track. Is the person in a role where you’ll be able to measure their contribution to your bottom line?Read more »

An emerging trend is both disrupting and creating business. It’s the sharing economy, sometimes referred to as collaborative consumption. Put simply, it gives people the option to hire access where before they could only buy a product.
What’s new, you say? Rental business is well established. However,Read more »

Do you look forward to networking events or would you rather tidy your sock drawer? For some people networking is a lot of fun while for others it’s an ordeal. Yet it’s a given that networking helps you put your business out there and keeps you in touch with leads and new ideas.Read more »

Cheque payments
From 1 October 2014, you will no longer be able to make cheque payments or drop off returns to branches of the Westpac bank. You will however, still be able to make cash and Eftpos payments at the branch. You can still post cheques to the IRD –Read more »

The Government has extended online services to build employer registration into the process of incorporating a new company.
Up to now, companies have been able to register for income tax and GST and obtain their IRD/GST number when incorporating online on the Companies Office website. But the process has then required a visit to Inland Revenue’s website to register for PAYE and FBT as an employer,Read more »

When it comes to working efficiently, everyone has some idea of what works for them and what could work better. As a business owner, you can get stuck and find yourself working harder than anyone else, for longer hours,Read more »

If an individual is a New Zealand (NZ) tax resident they will be taxed in NZ on their worldwide income. Conversely, if a person is non-resident they will only be taxed in NZ on their NZ sourced income. This makes it important for a person to confirm their tax residency when they leave the country as it determines the extent of their continuing NZ tax liability.Read more »

You may or may not be aware that recent changes to Financial Reporting legislation and who is required to be audited has been some of the most significant we have seen in New Zealand for more than 20 years.
In previous newsletters we have reported on the new Financial Reporting Framework.Read more »

Figures released by the Treasury show that high income earners are paying a higher percentage of the income tax take than ever before. Six percent of earners in New Zealand earn over $100,000, and in the 12 months ending March 2013,Read more »

Did your New Year’s resolutions include making significant changes, gaining control over, or simply maintaining your business in its current form? If so, putting a plan in place will help you think through the critical aspects of your business and help you to make good decisions in the year ahead. Like a map,Read more »

Last year ended with the passing of important new acts for the accounting industry that will have significant impact and implications for organisations such as yours. In this article, we challenge you to consider what your governing body needs to consider to be best prepared for changes effective from 2015 onwards,Read more »

For many businesses, 31 March is an important date because it is the end of their financial year, and it is the last day their accountant has to file their prior year’s tax return. To make the year end process as smooth as possible (at least from a tax perspective),Read more »

Summary
Outside of cost of sales, wages are the largest expense incurred by pharmacies.
The information obtained from the survey helps Moore Stephens Markhams’ clients make key management decisions and improve the performance of their business.Read more »

A bill currently before Parliament includes changes to the tax rules relating to foreign superannuation funds held by New Zealand residents. Due to the complexity of the existing rules, many New Zealand residents have been blissfully unaware that a tax obligation even existed.Read more »

The Taxation Review Authority (TRA) has recently heard a case involving a Trust that had been buying bare land, building houses and then selling them but not treating the proceeds as taxable.
The Trust itself comprised three trustees, Mr and Mrs B,Read more »

A bill currently before parliament includes changes to the tax rules relating to foreign superannuation funds held by NZ residents. Due to the complexity of the existing rules, many New Zealand residents have been blissfully unaware that a tax obligation even existed.Read more »

In the past, in order for a principal caregiver to receive an in-work tax credit there was a requirement for the person to be a full-time earner receiving income from a work activity such as salary, wages, or a shareholder-employee salary.Read more »

Taxpayers often travel away on business and take a companion to accompany them. As a taxpayer, travel expenses incurred in the course of earning assessable income can be deductible provided there is sufficient connection between the expenditure incurred and the taxpayer’s business activities. However,Read more »

In taking on a commercial lease for business premises, there are many things for a business owner to consider. One of these could be a request from a landlord for a personal guarantee. Generally a landlord will require a combination of a security deposit/bond or bank guarantee,Read more »

In relation to corporate failure, there are some common misconceptions about the liability of company directors. Operating as a limited liability company does provide a level of protection to shareholders; however company directors can be held personally liable for debts of the company if they have breached their director’s duties.Read more »

Changes coming to New Zealand’s health and safety compliance rules could see fines of up to $3 milllion imposed on offending businesses. This is an issue that cannot be ignored. We encourage all businesses to seriously review your health and safety regime now.Read more »

A due diligence is a sort of “business investigation” that is commonly undertaken by a prospective purchaser prior to acquiring a target business. This is somewhat similar to a building inspection you may carry out before completing the purchase of a property.Read more »

The Inland Revenue Department has spelled out its final view on what constitutes tax avoidance for the first time in 13 years, in a 135-page document.
The last time a final determination on tax avoidance was released was in 1990, and the publication of new finalised guidelines has been delayed by a string of wins in the courts for the IRD over the last five years,Read more »

Some of the recent changes in the way pharmacy is funded may have had a major impact on the appearance of your pharmacy’s financial statements.
Decrease in cost of medicine
One of the main influences has been the significant decrease in the cost of a number of medicines over the last 12 months or so.Read more »

Have you entered into a contract recently via electronic communication? Did you consider whether the communications were legally valid?
Historically, one would expect that a handwritten signature was a necessity of a valid contract. The reality is that the way we do business has changed markedly in recent years,Read more »

In this article we conclude our series about the value of a client advisory board (CAB) as a tool to evaluate your business performance. As you finalise the planning for your CAB, bear in mind the core reasons behind your decision to host one and what you hope to achieve by doing so.Read more »

If a pharmacy is sold through a sale of shares, there are no changes to the underlying business and the pharmacy continues on as usual under the new ownership. The balance sheet items, including debtors, uncollected prescriptions, stock, creditors and loans all in existence as at the date of share sale,Read more »

There are often good intentions behind New Year’s resolutions; lose weight, improve work-life balance and be more successful. However, life has a funny way of upsetting the best laid plans and it is the same in business where the new norm is to expect the unexpected.Read more »

If you’re considering entering or exiting a commercial lease arrangement in the coming months, we advise you to contact your advisors to discuss the potential tax implications arising from changes to inducement and surrender payments effective from 1 April 2013.
Lease inducement payments
Lease inducement payments are lump sum cash payments made by commercial landlords to tenants that provide an incentive to enter a lease arrangement.Read more »

Often in disputes over estates, questions arise as to who should pay the parties’ costs. Should the estate bear the cost, or should the proceedings be treated as any other civil litigation, in which the unsuccessful party must pay the costs of the successful party?Read more »

Businesses performing well in the current climate recognise the opportunities that lie within the office walls… your key staff! Developing a healthy business culture will prove a valuable investment, helping you to retain, motivate, and propel key team members and your business.Read more »

In spring 2012, we outlined how a client advisory board is a tool to evaluate your business performance. In this second article, we cover steps to make your board truly effective.
Planning the event
So you’re taking the plunge to get an honest view of how your clients see your business. It’s important to plan now to ensure that you (and your clients) get the most out of this important meeting. Consider your clients when deciding on a time and date –Read more »

If you’re considering entering or exiting a commercial lease arrangement in the coming months we advise you to contact us to discuss the potential tax implications arising from proposed changes effective 1 April 2013.
Lease inducement payments are a lump sum paid by a commercial landlord to a tenant providing incentive to enter a lease arrangement in times of high lease vacancy. Currently such payments are treated as deductible for the landlord and as capital or non-taxable receipts for the tenant.Read more »

The introduction of accounting programs like Xero, Banklink and MYOB has provided major advantages to business such as speed and accuracy of operation, and perhaps most importantly, the ability to see the real-time state of your business’ financial position at any time you choose.Read more »

Every business big or small will undertake projects from time to time. Each project will vary in size and nature, but the keys to success will remain the same.
Objective – before starting any project, it is important to ask the question ‘why’? Why are we doing this? Is it something we need to do? Or perhaps someone told us we need to? Knowing why a project is needed will establish the overall objective and the desired outcome.Read more »

The phrase ‘repairs and maintenance’ (R&M) is typically used to refer to costs for repairing, altering or maintaining a capital asset. These costs are immediately deductible if they are revenue in nature and not subject to the capital limitation. In practice it can be difficult to determine whether costs are of a capital or revenue nature,Read more »

Changes in the depreciation rate of buildings introduced in the 2010 Budget could have significant impact on a winery’s tax position this year and attention to this is needed now to avoid nasty surprises, particularly for those that have made large scale investment.Read more »

Do you know what your customers think about you? And where they want your business to take them?
In part one of a two-part article, we look at a client advisory board as a tool to evaluate your performance.
Customers are assessing your business every time they buy from you,Read more »

Look Through Companies (LTCs) is a new tax entity created in December 2010. The passing of this legislation also involved making changes to the rules for Qualifying Companies (QCs) and abolishing the old Loss Attributing Qualifying Companies (LAQCs).
LTC means that the company is “looked through”Read more »

Great testimonials will build a prospective customer’s trust and confidence before they buy. A testimonial is much more than a quote about how ‘really great’ your product or service is – a testimonial needs to state effectively how and why something is great,Read more »

Home office expenses
If you have been using an area of your home for your business, you may be able to claim the business portion of the household expenses as a deduction for income tax. Some of the household expenses include rates,Read more »

A complaint is an opportunity to turn a disgruntled customer into a loyal customer.

Act FAST, don’t stew over the complaint.
Be a good listener and keep your cool.
Be positive in your response, the tone of your voice or correspondence must always remain fair and professional.Read more »

In today’s economic climate it has become more important than ever to have developed a good business plan and to have prepared a budget. Too many businesses only prepare these documents when their financier requests them.
From our experience, many winery businesses follow an ‘earn-and-spend-as-you-go’Read more »

Protection against the consequences of personal injury is an important part of operating any business. Options available include ACC CoverPlus, ACC CoverPlus Extra, no cover or acquiring insurance from a private provider.
All self-employed and shareholder employees should have some form of ACC cover.Read more »

With proposed changes underway to the financial reporting requirements of various entities, are you aware of the way your company may be impacted? The financial statements your accountant prepares each year are required under statute, and the disclosures contained within are mandated from a large number of individual financial-reporting standards.Read more »

As a business owner, director, or manager you enter almost daily into legally binding contracts. With contracts being such an integral part of any winery business operation,it is therefore important to ensure these are considered and provide best practice protection. This is even more important in today’s current economic environment.Read more »

From the 2011/12 income year, depreciation on buildings reduced to zero percent.
Acknowledging that some taxpayers may have previously taken the conservative approach of classifying fit-out as “building”, the new legislation does provide the option of allowing some depreciation at two percent (straight line).Read more »

A recent global survey highlighted some intriguing facts and issues for employers when hiring, and managing employees born between 1980 and 2000. This demographic, known as the ‘millennial’ generation, is showing they have clear preferences for how they want to be employed and managed.Read more »

Wineries will need to be market savvy if they are going to survive and see growth in margins as well as sales.
New Zealand wineries are being advised that whilst it is critical in the current economic climate to focus on cost efficiencies,Read more »

Question:
I have been reading in the newspaper about a tax case “Penny & Hooper” which has got me worried. It seems that the people in Penny & Hooper have been penalised by the IRD for using a structure that is common in New Zealand,Read more »

PAYE generally applies to cash paid by an employer to an employee, while FBT applies to non-cash benefits provided by the employer to the employee. However, it is not always clear whether PAYE, FBT or neither applies.
The basis upon which an employee receives a benefit will determine how it should be treated.Read more »

A commonly held marketing statistic reveals that, on average, businesses spend the majority of their marketing dollar prospecting for new customers rather than nurturing and developing relationships with current customers.
These statistics also tell us that on average it can cost six to seven times more to sell something to a prospect than to sell that same thing to a current customer,Read more »

Recent changes to wine excise legislation are an industry sore point. Designed to curb New Zealand’s binge drinking culture, excise tax is actually paid by producers and in the current economic environment these costs are seldom passed onto consumers. The tax is an eye-watering $2.70 per llitre and the new excise tax thresholds,Read more »

Over the last two months, Markhams’ column has discussed the types of valuation methodologies used in pharmacy and some techniques for reading and interpreting the financial statements of your business. This month we will look at some trends we have seen over the past year including trends in the valuation of pharmacy businesses,Read more »

Markhams is often asked to value pharmacy businesses. While pharmacy businesses do have some unique characteristics, they are subject to the same basic value rules as other businesses. Value is represented by either the cash-flow the business can generate (discounted cash-flow valuation methodology) or the value of the underlying assets owned by the business (net tangible asset valuation methodology).Read more »

In February, Markhams charted accountancy firm’s Christchurch office was displaced from its CBD building. Within two weeks, the office was back on deck helping clients from a new location in Christchurch. This month, the human resources manager from that office, Pauline Loach-Ponga,Read more »

Many vineyards have incurred losses in recent years and the LAQC (Loss Attributing Qualifying Company) structure has proved useful where shareholders have had other sources of income with tax paid at source.
In May 2010, the Government announced the introduction of flow through treatment of profits and losses for closely held companies.Read more »

Question:
I am a pharmacist who has invested in a rental property as a way to save for my retirement. Over the last few years I have used the tax refunds from the losses on my property to help fund the cost of the mortgage and other expenses.Read more »

Cash flow management is fundamental for helping build and maintain a successful business, and debtor management plays a key role. It may be beneficial for some businesses to supply goods and services without immediate cash payment by offering credit.
Credit can provide customers with the ability to purchase more expensive items than they would otherwise be able to purchase with cash.Read more »

Trusts have become a popular tool for safeguarding family assets against claims such as professional liability, business debts, and relationship property matters, just to name a few.
If you are the trustee of a family trust it is important to be fully aware of the responsibilities that come with this role.Read more »

Question:
I am a locum pharmacist in several pharmacies. Sometimes I work in more than one pharmacy in one day. Can I claim the means that I pick up in between jobs as an expense in my income tax return? What about the cost of travel between the pharmacies?Read more »

Question:
I am running a pharmacy with a business partner and we are considering bringing a colleague in on the business. Is it an advantage to have a constitution or shareholders agreement?
Answer:
Yes, and it is possible to adopt either a constitution or shareholders’Read more »

Depreciation provides a mechanism to recognise the economic decline in value of an asset as it is used to derive income. Depreciation does not represent a deduction for the cash cost of an asset, but is an allowance for loss in value.Read more »

A large proportion of New Zealand businesses are operated through companies that are small and closely held. A shareholders’ agreement is often overlooked because legally a company constitution is all that is required. However, a shareholders’ agreement can prove invaluable down the track.Read more »

New Zealand’s mountains and beaches provide an excellent lifestyle for most of those that live here. The flipside of the proximity of our towns and cities to mountains, volcanoes and to the ocean is there is a relatively high risk of suffering from some sort of natural disaster.Read more »

With the upcoming GST increase from 12.5 percent to 15 percent, effective 1 October 2010, there are a number of considerations to be made to ensure your financial accounting systems are in place and ready.
We put forward the following aspects that you should consider now so that your business moves from 30 September to 1 October without any hiccups.Read more »

It is often said that ‘failing to plan is like planning to fail’. In today’s economic climate the need to plan is critical to the ongoing success, and in some instances survival, of your business. Two effective tools for planning are budgets and cash flow forecasts.Read more »

At a recent national Markhams group conference, members of the Wine Business Development Unit heard an interesting anecdote, which formed part of a presentation on distribution and retail trends by David Batten, National Brand Manager for Vintage Wines and Spirits Ltd.Read more »

Question:
What does community pharmacy need to consider with regard to the proposed GST increase?
Answer:
Currently there is a proposal GST will increase and personal income tax rates will decrease. If the proposed increase to GST proceeds there are several issues pharmacies will need to consider.Read more »

A recent case must have given some employers pause for thought.
The Employment Court has ruled that employers must pay KiwiSaver contributions in addition to the minimum wage, not inclusive in the minimum wage. In a ‘total remuneration’ package, the gross wage must amount to at least the minimum wage plus compulsory employer contributions.Read more »

Recently a number of pharmacies have been placed into liquidation. It has later been discovered that the owners’ involvement in other ventures has proven detrimental to their pharmacy business.
It can be tempting for the owners of a profitable pharmacy business to use the cash-flow and value of the pharmacy business either as security for other ventures or to fund negative cash-flow projects.Read more »

Many pharmacies are owned by more than one owner. Joint ownership of any business has several advantages – in pharmacy the advantages are more pronounced as the business always needs to have a qualified pharmacist on site.

Many of you will be so busy in the day to day running of your pharmacy business that you do not have time to take a step back to look at your pharmacy as a business that exists at least to some extent to generate profits.Read more »

For the last couple of years employers have been saying that the lack of good staff is the biggest constraint to the growth of their business. In stark contrast with this, over the last few months as the economy has tightened,Read more »

In these turbulent economic times, businesses are facing many challenges. One continuous battle is the management of costs. The 2008 Hawke’s Bay MAF monitoring vineyard model shows production costs were up 13 percent on the previous year. Biggest increases were noted in the areas of labour, weed and pest control,Read more »

Global economic crisis, credit crunch, financial meltdown – all terms that have been echoing around the world in recent months. What has been happening around the world will inevitably affect New Zealand businesses generally and the wine industry specifically.
The state of the world economy is such that New Zealand cannot ignore what is happening – after all,Read more »

At the Focus Vineyard Economic Benchmarking Seminar held in May, Dan Druzianic, chartered accountant and business advisor from Markhams Hawke’s Bay briefly introduced growers to a new streamlined accounting software package that he believed was ideally suited to grape grower needs.Read more »

The rampant increase in land values during the past few years has created a few goldmines for those carving up and selling land. Historically the IRD has paid little attention to this area, but that’s likely to change so it would be wise to consider the question of tax liability before IRD does.Read more »